Metis Energy enters sale and purchase agreement to sell remaining shares in Manhattan Property Development

Renewable energy infrastructure company Metis Energy has entered into a sale and purchase agreement with Kaiyi Investment to sell shares in Manhattan Property Development (MPDPL) for US$45.7 million.

Metis Energy, formerly known as Manhattan Resources, currently holds 30.2 per cent shareholding interest in MPDPL, while Kaiyi, an investment holding firm, holds 69.8 per cent.

The company had agreed last Friday (Sep 2) to sell all its remaining shares in the capital of MPDPL to Kaiyi, which had agreed to purchase, Metis Energy said in a bourse filing on Sunday.

In 2014, Metis Energy had entered into a joint venture agreement with Kaiyi in connection with the incorporation of MPDPL. The principal asset of MPDPL is its wholly-owned subsidiary, Manhattan Resources (Ningbo) Property, which carries out the group's property development business in China, primarily the development of the Ningbo Yinzhou Manhattan Tower.

Based on the group's latest consolidated audited financial statements for the financial year ended Dec 31, 2021, the book value of the sale shares is approximately S$60.4 million. The net tangible asset value attributable to the sale shares is approximately S$56.9 million.

Kaiyi is required to pay a deposit of US$5 million in cash to Metis Energy within 2 months from the date of the sale and purchase agreement, the company said. The deposit is refundable in full and without interest within 5 business days of the long stop date if the completion of the sale of the sale shares does not take place and the sale and purchase agreement, other than the surviving clauses, lapses.

The sale consideration was arrived at on a willing-buyer, willing-seller basis, after taking into account prevailing market conditions, the value of the sale shares, and the rationale for the proposed disposal.

The proposed disposal is in line with the company's intention to "diversify into the renewable energy business comprising on-grid and off-grid renewable energy business segments and selective clean energy power projects" with a focus on Asia and Australia, said Metis Energy.

In addition, the company will not inject any additional funds for the property development segment, it said, adding that Kaiyi has taken the lead in funding the construction projects for property development in the Ningbo Yinzhou Manhatten Tower project.

"Given that onshore project financing in the People's Republic of China has been delayed, instead of seeking shareholders' approval for further dilution of its stake in MPDPL, the company is seeking a full exit from its investment in MPDPL," it said.

Proceeds from the proposed disposal will also provide another source of capital expenditure, development cost, and working capital for its renewal energy business, it added.

Assuming the proposed disposal had been completed on Dec 31, 2021, the net tangible asset per share of Metis Energy after the disposal would be 2.85 Singapore cents, from 2.73 cents.

And assuming the proposed disposal had been completed on Jan 1, 2021, the earnings per share of the company would be 0.063 cents, up from a loss per share of 0.06 cents.

Metis Energy has also entered into a loan agreement with Onward Capital (OCPL), where OCPL has agreed to extend to the company a loan facility up to a maximum principal amount of US$30 million.

The amount will be used to finance the group's capital expenditure for renewable energy projects and general working capital requirements, to be disbursed in one or more tranches, the company said.

Shares of Metis Energy closed flat at S$0.058 last Friday.

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